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Did Gold Find New Support?

Commentaries & Views

On Monday, gold and silver both had nice rallies and the big question is: has gold found a new support level? The range since January in gold has been $1,300 to $1,365, and since the March 21 rally, there appears to be a new support level at $1,330. In the last seven days since breaking above $1,330, gold has held that level, narrowing the range and indicating there could be a breakout to the upside.

We are still playing the range with a new support level of $1,330. Until the breakout occurs, selling at $1,365 is the correct play. Consolidation can last for extended periods of time as witnessed by the current range, which has lasted over three months. Eventually gold and silver will break out one way or the other, but for now the uncertainty keeps them both in a trading range.

Watch the dollar, interest rates and the equity markets for clues. We expect the dollar to pop higher, which could create pressure on the metals. However, based on the way they have been trading, it appears they have priced in a higher dollar within the trading range. The footprints will show the way; the key here is the patience to wait for the guidance of the charts.

Keep those stops tight.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.
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